I’ve recently conducted several 360 degree surveys for my Redpoint clients. A 360 degree survey provides feedback to a business owner in the form of an anonymous performance assessment by all the people (subordinates, colleagues, managers, clients, suppliers) who surround that person (hence “360 degree”).

In the case of my clients, the owners and CEOs typically want to receive feedback on their leadership skills from their staff. During the process, we define the criteria they want to use for the assessment, and then I draft a questionnaire, survey the staff, and compile and present the results.

Now, if you think this is an intimidating exercise, you are not alone! Because of the anonymous nature of the exercise, staff members are often brutally honest and are not reluctant to reveal their views. In each case, my clients have taken on the challenge bravely, knowing that this candid assessment is a critical first step towards their own improvement.

Back comes great feedback about their performances as “the boss.” They are perceived as exceptional at interacting with clients, great at getting business results and strong communicators. The two critical areas of improvement I continually observe are:

Lack of quality time spent with staff; and

Lack of trust

Critical area #1: You need to spend more quality time with your staff

Lots of owners of growing companies experience this: heavy workloads prevent you from spending time with the very people you rely on to get the job done, and who look to you for direction, mentorship and reward. Your busy schedule therefore leads to ‘seagull’ management: you stop in quickly and drop a ton of information, directions and sometimes criticism on your staff before you quickly take off again.

It came back loud and clear from my clients’ feedback: you need to take the time to talk to people substantively, ask them how things are really going, and really listen to their answers. It is not necessarily the quantity, but quality of time and interaction that counts.

Staff members who have been heard and feel that their feedback and suggestions have been taken on board are always more engaged workers. And engaged workers are almost always better performers.

Ask yourself: Over the last week, how many people in my business have I asked how things are going? How many people have I thanked for a job well done? Remember: praise in public, criticize in private. And, of course: when you are wrong (and you are and will be :-), apologize.

Critical area #2: Lack of trust: “We sometimes feel you do not trust us. It always has to go your way”

I am sure this sounds at least somewhat familiar to most business owners. After all, this is your baby, you have grown it and you know best what it needs. Trusting someone else to take over and perform tasks you have owned for so long is incredibly difficult.

In fact, the reason why people start businesses in the first place is that they believe they can perform a particular task better than anyone else (or at least better than their current or past employer). This strong belief in one’s abilities is one of the great strengths of the entrepreneur. Yet we know this strength can also become your biggest liability: the reality is that if you want to build a company, you have to trust people to help run it for you.

Trust sounds like a challenging concept to actively develop, but Carl Robinson, a Seattle based psychologist and executive coach, offers some helpful insights in his discussion of trust that appeared in an article in the Journal of Managerial Psychology (2004):

Motive-Based Trust is what most people think about when they think of trust. It is based on the belief that another’s values, goals and beliefs are closely aligned with yours.

Competency-Based Trust is based on your belief that your employees have the capabilities to get the job done.

So how then can we learn to develop these forms of trust?

How To Develop Competency-Based Trust

Assess Your Hiring: Do you have the right people in place to get the job done? Do they either have the necessary capabilities or are they willing and able to learn them? If yes, read on. If no, you need to consider making some staff replacements.

Take time to observe your people in action. Give them goals and let them come up with their own methodologies. Resist the huge temptation to jump in with solutions and advice-giving. If, after a while, you do not like what you see, go back to assessing your hiring practices or start providing more training.

While developing competency-based trust is relatively straightforward, motive-based trust tends to develop only once competency-based trust is established; motive-based trust is, therefore, harder to assess. Because this is a more intangible area, lots of entrepreneurs rely on their instincts. Remember, though, that you have great tools to align motives:

Remunerate staff based on their performance (e.g. a commission pay structure for your sales staff or a profit sharing pay scheme).

Provide key staff members with equity in your business. Carl Robinson argues that in an imperfect world where trusting relationships sometimes have to develop quickly, distributing equity is a great way to establish tentative trust.

My experience with 360 degree surveys has shown me that spending quality time with your staff and developing competency- and motive-based trust makes all the difference between mediocre and great business owners.

Contact me if you would like more information on conducting a 360 degree in your organization.

The technical aspects of succession planning are covered at length in both the academic literature and in the work of ‘real life’ consultants. Less explored are the very real and equally influential personal struggles and strong emotions that often unfold during the succession process.

Anyone who has ever been in charge of an organization knows the kind of personal investment this work requires. After a while, being the CEO is not what you do but who you are. This is even more true for founders. So transitioning out of the top spot and handing over the role that has essentially become ‘You’ is a very personal process indeed.

Even as you continue to lead your organization, you need to prepare for your departure. You might think that this will be easy. You will likely be wrong! Handing over leadership to the next generation will be tougher than you think.

Letting go is hard to doAny successful transition starts with coming to terms with the fact that it is probably going to be hard for you to let go. Leaders who realistically face the personal challenges of transitions are much better prepared to leave than those who deny the difficulties.

In addition to leaving significant monetary benefits and perks behind, what makes it so hard to leave what is after all a highly stressful job. What can you do to ease the transition?

The mind-set that served you well going into the job (or founding the company) will make it challenging for you to transition out–in all likelihood, you have become the job. Going into the job you had to be convinced that you were the one who could do the best job at leading the organization. You also must have either convinced a board and/or numerous lenders and investors that you were the absolute perfect person for the job. For most leaders, pulling this off requires a very healthy ego when it comes to work performance. Even if you are modest and not a show-off, transitioning from being in the midst of it all, making it all happen, to taking a background mentoring role and getting your kicks out of your successors’ successes (versus your own) can be very challenging.

Along with the proverbial corner office, here’s what you’re likely to miss most:

Status: When we hear status, we often think of corporate CEOs with all their perks, name recognition and corporate jets. But status can come in a lot of different forms. Successful business owners in small town America, for example, enjoy a fair share of status as well. They are admired by their community and receive a lot of recognition for their position. Even if you were never seeking status, losing it and becoming a ‘used to be’ can be very difficult. Many studies have shown that losing something (e.g., status) creates significantly more pain than the amount of pleasure we enjoyed when we originally obtained it.

Power: When you’re in charge, you know your job matters! Every single day you are making a difference in people’s lives. Not many people have as much influence as you. Power might simply be defined as being able to influence. No one in any managerial position gets anything done without power. Top leaders have a high need for power. Throughout your career you have gradually gained more and more power. When you leave your job you will suddenly feel a loss of power. Marshall Goldsmith recounts one executive’s perspective: “It was like falling off a cliff. My loss of power: ‘They are not bothering to return my phone calls.’ When I was the CEO, my phone calls always were immediately returned!”

Meaning: Most CEOs find true meaning in their work. They truly care about what their organization is doing for their clients. They value their workforce and are passionate about the mission of the business. You might fear that nothing you will do in the future do will ever make as much of a difference and create as much meaning for you as being CEO. You might be right. Often one of the most challenging parts of the succession process is to find new and uncharted ways to create meaning in your life.

Relationships: Unless you are working in a family business, you will have spent significantly more time with your co-workers, clients and suppliers than with your friends and family. As the leader, you like most of your co-workers – otherwise they would not be working for you anymore. You have been through highs and lows and have seen the best and worst in each other. The more you have been through together the closer you will be. Some of your co-workers will have become close friends and some feel like family. It can be very hard to leave your workplace friends and family.

Picking the Right TimeIt will almost certainly be hard for you to choose the right time to slow down and hand over leadership. If your organization is achieving wonderful things, growing, making a difference for more people every year, adding cash to the bottom line and providing a wonderful work environment, why in the world would you want to leave?

If, on the other hand, you are falling behind or not achieving what you set out to do, your competitive drive won’t let you quit. After all, a lot of what you achieved was due to the fact that you kept going against all odds. You persevered when a lot of other people would have thrown in the towel. You will be convinced that you will be able to turn the ship around if only you are given a bit more time.

When deciding on the right time to leave, consider these two useful principles:

You make the call – leave while you can still make the decision rather than having the decision made for you. Remember that being able to choose the right time to leave is a privilege. Many leaders are not that lucky. They either get pushed out of their position (by the board, other family members, or their successor) or their health forces them to step down. Treat this choice as the privilege it is and don’t simply bury your head in denial about your eventual departure.

Go when you feel pulled towards something rather than when you feel pushed out of the business – While it will be difficult to leave your current position, try to make the move at least in part because you have ‘something better’ to do afterwards. Move while you are attracted to and intrigued by (and in demand for!) a different opportunity and before you are pushed out of your leadership position either by higher forces or by the fact that you have tired of the top job.

Building a Great Rest of Your Life‘Who am I going to be?’ and ‘What am I going to do?’ are the all-important questions you have to ask yourself as you prepare for succession.

Most retiring leaders leave their positions in their sixties when they are in good health and have twenty + years ahead of them. For the majority, a leisurely retirement spent sampling cruises and chipping away at their golf handicap is not an option. Many have tried it. Most realize that the desire to just rest and relax won’t last very long and that their drive and ambition did not simply disappear with their job. Simply stopping might therefore not be an option.

Today’s retiring leaders are looking to continue to make a contribution and pursue something that has true meaning. Instead of becoming a person who used to make a difference, they want to remain a person who still is making a difference.

They are also looking for happiness realized by living lives full of meaning and contribution, and enjoying close relationships with friends, family and the new team members in the ‘after job.’

If you are nearing succession, think about the rest of your life. Now is a great time to start planning and challenging yourself. How can you make a contribution? What makes you really happy? How can you find meaning?

You might have 20-30 years left. How can you make this time count for yourself and for the people around you?

If you have a path beyond your current leadership role that you believe will give you meaning and make you happy, it will be much easier for you to let go. If on the other hand, you see no options that excite you, you are more likely to hang on much longer than you should.

Three concrete things we encourage our clients to do when we’re coaching them through handing over the baton of leadership of their business:

Learn from others who have been in your shoes. Seek out peers who have gone through the process. Find out what has worked for them and what has not. Remember: a smart person learns from her mistakes. An even smarter person learns from the mistakes of others.

‘Interview’ the people who know you best about potential pitfalls and opportunities of the succession process. Treat this as a research project: What do your friends and family think? What are they most excited and most worried about for you? If they could give you once piece of advice, what would it be?

In thinking about how to build a great rest of your life, fast-forward 5 years and write a holiday letter for 2015 to your friends and family. What did your life look like this year? How did you spend your time? What got you excited? What were the challenges? What are you looking forward to in 2016?

Note: this article was inspired by the writing of Marshall Goldsmith, in particular his book: Succession. Are You Ready? Harvard Business Press 2009.

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